Understanding Shopify Inventory Changes On-Hand vs Available

In the ever-evolving world of e-commerce, inventory management is crucial for business success. Shopify, one of the leading platforms for online stores, recently introduced changes to its inventory system that have sparked discussions among merchants. This blog post will delve into the new inventory management system, explaining the differences between “On-Hand” and “Available” quantities, and providing insights on how to navigate these changes effectively.

The New Inventory States: On-Hand and Available

What is On-Hand Quantity?

On-hand quantity represents the total inventory you have at a specific location. This includes items that are:

1. Available for sale
2. Committed to orders
3. Set aside as unavailable

Essentially, on-hand quantity is what you’d input after conducting a physical stock count.

What is Available Quantity?

Available quantity refers to the number of items that are actually available for sale. This is the on-hand quantity minus any items that are committed to orders or set aside as unavailable.

The Relationship Between On-Hand and Available

To better understand the relationship between these two quantities, consider this example:

• You have 100 units of a product in your warehouse (on-hand)
• 20 units are committed to pending orders
• 5 units are set aside as unavailable (perhaps for quality control)
• Your available quantity would be 75 units (100 - 20 - 5)

Navigating the New Inventory System

Updating Inventory Levels

With the new system, merchants now update the on-hand quantity rather than the available quantity. This change aims to provide a more accurate representation of your total inventory.

Handling Negative Inventory

For businesses that allow backorders or pre-orders, it’s still possible to have negative available quantities. Set your on-hand quantity to 0 and check the “continue selling when out of stock” option for the item.

Viewing Inventory States

To view all inventory states for a product:

1. Go to the product page
2. Click on the inventory section
3. You’ll see on-hand, available, committed, and incoming quantities

Adapting Your Workflow

For Physical Inventory Management

If you maintain physical inventory:

1. Update your on-hand quantity after stock counts
2. Use the available quantity to determine what can be sold
3. Monitor the committed quantity to track pending orders

For Made-to-Order or Dropshipping Businesses

If you don’t keep physical inventory:

1. Set your on-hand quantity to 0
2. Enable “continue selling when out of stock”
3. Use the committed quantity to track orders that need fulfillment

Potential Challenges and Solutions

Visibility Issues

Some merchants have reported difficulty in quickly assessing available inventory. To address this:

1. Use the inventory page view for a comprehensive overview
2. Consider using inventory management apps for more detailed reporting

Bulk Editing

The removal of the “Available” column from bulk edit screens has caused concern. As a workaround:

1. Use CSV imports for bulk inventory updates
2. Utilize the Products > Inventory page for viewing all inventory states at once

Leveraging the New System for Better Inventory Control

Improved Accuracy

The new system can lead to more accurate inventory tracking by:

1. Clearly separating physical stock from sellable stock
2. Providing better visibility into committed inventory

Enhanced Reporting

With distinct inventory states, you can:

1. Generate more detailed inventory reports
2. Make more informed restocking decisions
3. Better predict future inventory needs

Conclusion

While Shopify’s new inventory management system has introduced changes that may require some adjustment, it ultimately aims to provide merchants with more accurate and detailed inventory control. By understanding the differences between on-hand and available quantities and adapting your workflows accordingly, you can leverage these changes to improve your inventory management processes.

Remember, Shopify continues to gather feedback and make improvements to the system. Stay tuned for potential updates and new features that may further enhance your inventory management experience.